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USDA-FSA Increases Guaranteed Loan Limit

Raising the limit allow Farm Service Agency to meet financial needs of Missouri ag producers.

October 11, 2011

1 Min Read

The Missouri USDA Farm Service Agency announced last week that the loan limit for its guaranteed loan program will increase to $1,214,000. The limit is adjusted annually based on the "Prices Paid to Farmers Index," compiled by the USDA National Agricultural Statistics Service (NASS).

"Raising the guaranteed loan limit will allow FSA to better meet the financial needs of producers across the state," said Edward Hamill, Missouri FSA state director, Columbia.

Another change to the FSA guaranteed loan program will affect the one-time loan guarantee fee charged on all FSA loans obligated after Oct. 1, 2011. The one-time loan guarantee fee will increase from 1.0% to 1.5% of the guaranteed portion of the loan.

FSA guaranteed loans allow financial lenders to provide agricultural credit to farmers and ranchers who do not meet the lender's normal underwriting criteria. Farmers and ranchers apply for a guaranteed loan through a commercial lender, and the lender arranges for the guarantee. FSA can guarantee up to 95% of the loss of principal and interest on a loan. Guaranteed loans can be used for both farm ownership and operating purposes.

Agriculture producers who are unable to obtain financing through a commercial lender, including a guaranteed loan, could be eligible for an FSA direct loan. These loans are made by FSA with government funds and the limit is $300,000 (except for Emergency Loans which have a limit of $500,000). The maximum combined guaranteed and direct farm loan indebtedness is now $1,514,000.


For more information on USDA-FSA farm loan programs, please contact your county USDA Service Center or visit the website, www.fsa.usda.gov.

Source: Missouri Farm Service Agency office

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